For Talk107, Scotland's only commercial talk-radio station, the day of the long knives dawned last week.

Following the sacking of programme director and shock-jock Mike Graham last Monday, the Edinburgh and Lothians station managing director Matt Allitt dismissed no fewer than seven personnel on one morning in what is being seen as a desperate attempt to push the struggling station upmarket.

With the smell of blood still lingering after the dispatching of Graham, the body count soared on Thursday as Susan Morrison and six of the station's staff producers were handed their P45s. A station insider suggested Talk107 owners may face legal action over the sackings.

If Graham sees the circumstances as an implied criticism of his own personality, he is not letting it show. Speaking to the Sunday Herald last week, the former programme director, who is still in negotiations over the terms of his severance package, is outwardly positive about his time as a presenter of his weekday show The Independent Republic Of Mike Graham.

"I've had a great time. With a lot of help from some great people on the station we put together what I thought was a great radio show."

Bosses at UTV (formerly Ulster Television), Talk107's owners, obviously failed to share Graham's sunny outlook. Faced with listening figures that industry analysts call "woeful", Graham was the first victim of a strategy whose details remained unclear at the time of going to press. Although a new approach has been under discussion, its arrival has taken many by surprise. Breakfast presenter Susan Morrison is said to have been "looking forward" to the new strategy, unaware that she would be one of its first victims.

An insider said: "Morrison was widely seen inside the station as one of the presenters working hardest to make Talk107 work. No-one here knows what the strategy now is."

But even without that detail, it seems likely that last week's purge launched an attempt to move the station upmarket. "They want it to be like Real Radio, but without the music all shiny and happy-clappy," muttered one Talk107 insider.

What is known is that managing director Matt Allitt, who took up his post in November last year, decided to wield the axe after seeing new research, said to have cost tens of thousands of pounds, profiling the station's potential audience.

Sources have told the Sunday Herald that the researchers were tasked with discovering what was more important to listeners - news content or presenter personality. The latter came out on top.

But Graham's style was deemed to be too "aggressive" and "argumentative" for the station's revamped approach. This will not surprise occcasional listeners, who have long queried whether Talk107's approach fitted Edinburgh's audience profile.

Graham's departure is the first major change at the station since Allitt became managing director in November, replacing founding Talk107 managing director Peter Gillespie. Allitt is said to have called Graham with the news while he was relaxing at home last Saturday.

The sacked staff are being made to carry the can for Talk107's poor performance, but few would claim that Edinburgh radio listeners have taken the station to their hearts since it launched on Valentine's Day in 2006.

The first-year goal was 100,000 listeners, a figure the station has never been in danger of reaching even after two years. According to the latest listener figures from ratings agency Rajar, only 35,000 listeners tuned in for at least five minutes in an average week over the last quarter of 2007, a dire figure considering Talk107's potential audience of about a million in Edinburgh and the Lothians.

For all the under-performance to date, UTV bosses are believed to be committed to making the project work. Spending so far is said to have been high, including a salary bill for names such as Dominik Diamond from XFM Scotland and personality politician Tommy Sheridan.

Steven Farmer of UTV says: "The changes we are seeing now are in no way one last hurrah. We'll keep going." He concedes that Talk107 bosses have got the all-important tone of the station wrong in the past: "We are planning to reshape the content more in the style we now know listeners in Edinburgh want. That will be based on well-informed presenters with a great sense of humour."

Reports that UTV bosses were to ask regulatory body Ofcom if they could bend the terms of the station's licence by including occasional music were "entirely untrue", Farmer adds.

He says UTV continues to believe Graham is a "great broadcaster", but his style no longer suited Talk107's future plans: "We wanted more of an informed debate in the style of Jeremy Vine, rather than anything more confrontational. We're planning to get into a more Edinburgh mindset."

That position marks a noticeable change from the station's starting position. In those days managing director Gillespie talked about Talk107's "populist touch", citing football transfers and drug-taking children as examples of the kind of stories that the station would feature.

But the launch strategy was also based on extensive audience research, and radio experts see the clear-out as a sign of desperation. Some even believe that the commercial talk-radio format may not be viable in the UK market.

Listeners to talk radio stations tend to listen for shorter periods of time than audiences for their music-based equivalents. Other stations that use the talk-radio format, such as London's LBC and UTV's talksport, struggle to turn a profit. Although the format works well overseas, notably in Australia and New Zealand, some believe the BBC has too tight a grip on the UK market.

Graham told the Sunday Herald that, contrary to lurid reports, he had a good relationship with Talk107 colleagues. He said he enjoyed radio broadcasting so much he wanted to take his "show somewhere else soon", hinting that London was the most likely destination. UTV is said to be looking for a berth for him at one of their 18 other UK stations. Meanwhile, few doubt that the station he has left faces a tough fight for survival. As one station insider puts it: "They are now going head to head with the BBC, and Auntie is great at what it does. The people at Talk107 are good, but they cannot match that investment. Talk radio is more expensive to produce than music radio. I still think it is a flawed format.

"It is a shame, because Graham's show was one of the most entertaining bits on the station. It seems there has been a spat with the management, and Talk107 has been an unhappy ship for a long time."

Another of the sacked seven compares working on Scotland's first commercial talk-radio station to being part of Captain Scott's 1912 expedition to the South Pole: "I don't know if I have been one of the team that was forced to turn back. Or one of the ones who did get to the Pole, found it was pointless, and died heroically on the return journey."